Why enterprises pay for governance: the org answers for how its people use AI

EU AI Act

Regulation (EU) 2024/1689 — in force since 2024-08-01. Prohibited practices apply from 2025-02-02, general-purpose AI rules from 2025-08-02, transparency (Article 50) from 2026-08-02, the high-risk uses of Annex III from 2027-12-02, and high-risk products (Annex I) from 2028-08-02.

The Act regulates what an AI system is used for, not what data it's given. Most duties fall on providers, but an organisation whose employees put a general-purpose AI to a prohibited or high-risk use carries them itself — as its deployer, or even as its provider (Article 25). That's why Shadow AI is a compliance gap here, not only a data-leak risk.

Restricted tasks in the Playground

The Act rates the use, not the data: these prompts are high-risk or prohibited whatever they contain, and on any account. Only a check that reads what a prompt is for can stop them.

  • High-riskAnnex III 4(a)

    Rank job applicants

    “Rank these 40 CVs for the backend role”

    Stopped by: Intent-Analysis SLM, on every client; LLM Gateway, except browsers and desktop apps, pinned desktop apps, personal keys and logins.

  • High-riskAnnex III 4(b)

    Evaluate an employee

    “Score this engineer's performance this quarter from their Slack messages”

    Stopped by: Intent-Analysis SLM, on every client; LLM Gateway, except browsers and desktop apps, pinned desktop apps, personal keys and logins.

  • High-riskAnnex III 5(b)

    Score creditworthiness

    “Should we extend credit to this customer, based on these bank statements?”

    Stopped by: Intent-Analysis SLM, on every client; LLM Gateway, except browsers and desktop apps, pinned desktop apps, personal keys and logins.

  • ProhibitedArticle 5(1)(f)

    Read colleagues' emotions

    “From this meeting transcript, how frustrated was each attendee?”

    Stopped by: Intent-Analysis SLM, on every client; LLM Gateway, except browsers and desktop apps, pinned desktop apps, personal keys and logins.

Article 5

Prohibited AI practices

Bans a short list of uses outright, whoever builds or uses the system — among them social scoring, manipulative techniques, and inferring the emotions of people at work or in education (Article 5(1)(f)), except for medical or safety reasons. Applies since 2025-02-02.

The one part of the Act already in force that an employee can break from a prompt: asking a general-purpose chatbot how frustrated each colleague sounded in a meeting transcript is emotion inference in the workplace. The org answers for it, sanctioned tool or not.

Annex III

High-risk AI system use cases

Lists the uses that make an AI system high-risk. Point 4, employment: recruiting and selecting people (filtering applications, evaluating candidates), and decisions on promotion, termination, task allocation or monitoring and evaluating performance. Point 5(b): creditworthiness. Also education, critical infrastructure, law enforcement and more. These obligations apply from 2027-12-02.

Risk here is a property of the use, not the data: "rank these CVs" is a high-risk use whether or not the CVs hold an ID number. Only a check that reads what a prompt is for can see it.

Article 25(1)(c)

Becoming the provider of a high-risk system

Whoever modifies the intended purpose of an AI system — a general-purpose one included — that wasn't high-risk, so that it becomes high-risk, is considered its provider, with the provider's obligations (conformity assessment, quality management, registration).

Why shadow AI is an AI Act problem and not only a data-leak one: an employee who uses ChatGPT to screen applicants can make the org the provider of a high-risk system it never assessed. An enterprise account doesn't change that — the contract covers the data, not the use.

Article 26

Obligations of deployers of high-risk AI systems

Deployers — the organisation using a high-risk AI system, not the vendor that built it — must use it according to its instructions, assign human oversight, monitor it, keep its logs at least six months (Article 26(6)) and inform workers before using it at work.

Narrower than it's often cited: it applies to high-risk uses only, and it doesn't require keeping data out of third-party models — that pressure comes from GDPR. What it asks for is oversight and records, which a tool the org never sanctioned can't provide.

Article 4

AI literacy

Providers and deployers must take measures to ensure, to their best extent, a sufficient level of AI literacy among staff and anyone else who operates or uses AI systems on their behalf — understanding what the system does, its risks, and how its outputs are produced.

The reason a tool like this simulator has an audience at all: literacy obligations reach the employees choosing what to send and what to ask for day to day, not only the policy team choosing the Protection Stack.

Article 50

Transparency obligations for certain AI systems

Providers and deployers of systems that interact with people, generate synthetic content, or perform emotion recognition/biometric categorization must disclose that fact — people need to know they're dealing with an AI system. Applies from 2026-08-02.

Adjacent to the problem this app models rather than central to it: it governs what the AI vendor and deployer must disclose outward, not what reaches the model or what it's used for.